Edison International’s shares tumbled 7.4% in pre-market trading on Monday after California lawmakers failed to enact meaningful wildfire liability reform before the legislative session closed on August 29, 2026.
The stock, already trading below its 52-week high of $81.62, approached the lower end of its annual range as investors reassessed exposure to wildfire-related risks. Edison International and its subsidiary, Southern California Edison, reported $1.6 billion in losses tied to the Eaton Fire settlement as of June 30, 2026, underscoring the financial impact of unresolved liabilities.
Analysts downgraded the utility’s outlook following the legislative impasse. Mizuho cut its rating to Neutral from Outperform and reduced its price target to $70 from $86. Barclays maintained its Equal-Weight rating but lowered its target to $75, while Argus downgraded the stock to Hold. Morgan Stanley trimmed its target to $65.
The failed reform effort centered on bill SB 492, which passed without provisions to replenish the state’s wildfire fund or sever the link between fund solvency and liability caps, currently capped at 20% of the California Public Utilities Commission’s transmission and distribution rate base. Governor Gavin Newsom’s proposed limits on fund withdrawals to $6 billion per incident and elimination of insurer subrogation rights were excluded from the final legislation.
Mizuho noted that California utilities may pursue another reform attempt in 2027, though the outlook remains uncertain amid an incoming state administration. The broader U.S. stock market showed little reaction, with the S&P 500 down 0.2%, the Dow Jones falling 0.1%, and the Nasdaq declining 0.1%, indicating the selloff in Edison International was largely isolated to the California utility sector.
